Cross Media Marketing to Conclude LifeMinders Acquisition, Launch Premia Service
The company in July announced its acquisition of LifeMinders for $68.1 million. That offer was quickly countered by Encore Marketing International. But the LifeMinders board of directors did not view the Encore Marketing offer as superior to Cross Media's and rejected it.
LifeMinders sends personalized e-mail messages based on consumers' interests and preferences.
Under the revised terms of the acquisition, Cross Media increased the cash available for payment to LifeMinders' stockholders to $24 million from $12.1 million and raised the stock exchange ratio to 1.29 shares of Cross Media common stock from 1.23 shares.
Cross Media also launched Premia, a Web-based membership service that combines direct marketing and online channels such as e-mail. The service, which costs about $96 a year, offers consumers discounts on products and services. For example, consumers can sign up to get $100 worth of free gasoline for their car or a $600 reduction in their grocery bills.
Ronald Altbach, Cross Media's chairman/CEO, said the company hopes to acquire more than 1 million new members in the next two years at price points ranging from $40 to $200 per year.
"We'll go on a fairly aggressive new-member search to build up membership," he said. "With Premia, customers can get ongoing, substantial discounts on a lot of products."
Altbach said Premia, combined with LifeMinders' database and technology, would enable Cross Media to reduce its customer acquisition costs and deliver new services regularly.
He noted that the company plans soon to roll out the Everyday Savings service along with the Entertainment Savings Book, which offers coupons on entertainment events. It also plans to roll out a health and wellness service in conjunction with American Media, publishers of the National Enquirer and Star tabloid newspapers.
"We plan to team up with strong partners that have recognizable brands," he said.